US-based networking company Netgear is exploring manufacturing opportunities in India and will start manufacturing its products by 2020, said its CEO Patrick Lo.
The decision to shift its manufacturing hub from China is in the light of on-going US-China trade war.
Netgear manufactures networking hardware such as routers for business enterprises and high-end consumers segment. For the $1.1 billion company, B2B businesses account for about $300 million and the rest comes from consumer business.
“We are looking at opportunities to see whether we would be able to harness some of the manufacturing sites in India to shift our manufacturing capacities from China,” Lo, who was in India for the launch of new products, told Moneycontrol.
The company has multiple manufacturing locations in China, Vietnam, Indonesia and Thailand and all of them third party manufacturers.
“We are looking at whether we could made India the fifth location and gradually use India to replace China entirely,” Lo added.
For manufacturing, the company is looking at third party providers such as Foxconn in Chennai and in multiple locations in the country. “It is new for us. But if everything goes well we should start manufacturing within a year,” he added.
Explaining the company’s decision to shift manufacturing base, Lo reasoned that with Trump administration levying 25 percent tax on products manufactured in China, the company wanted to shift its manufacturing base to India.
The US and Canada are the biggest markets for the company accounting about 70 percent of Netgear’s business. Asia Pacific region accounts for 15-20 percent.
Talking about the growth, Lo said that India is an exciting market for the company.
“Many firms now are looking beyond China for manufacturing and looking at India as a potential manufacturing hub,” he said.